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38. INSURANCE RISKS (CONT’D)
Premium liability sensitivity analysis (cont’d)
b. Change in recovery rates
On the premium liability front, assumed nil recovery rates for all the products. Increasing this to 10% gives the
following results:
2013
2012
Net
Net
RM’000
RM’000
RM’000
RM’000
High
Low
High
Low
+10%
–10%
+10%
–10%
Estimated premium liabilities
17,413
13,669
N/A
11,724
c. Change in Claim Handling Expenses (“CHE”)
Assumed CHE of 10%. Changing this by 10% points gives the following results:
2013
2012
Net
Net
RM’000
RM’000
RM’000
RM’000
High
Low
High
Low
+10%
–10%
+10%
–10%
Estimated premium liabilities
17,230
14,443
14,147
11,839
d. Change in PRAD %
Assumed a premium PRAD of 50%. Changing this by 10% (to 55% and 45% respectively) gives the following results:
2013
2012
Net
Net
RM’000
RM’000
RM’000
RM’000
High
Low
High
Low
+10%
–10%
+10%
–10%
Estimated premium liabilities
16,364
15,308
13,426
12,560
NOTESTOTHEFINANCIALSTATEMENTS
31 DECEMBER 2013
186
EXIM Bank Annual Report 2013